Farm Laws 2020

Recently, there have been a lot of noise around the farm laws. While its easy to get swayed with the media and noise, it is important to understand the law before concluding anything. let us deep dive and understand these recent farm laws in a summarized form and a simple language:

There are 3 farms laws either new or with some changes adopted in 2020, which are summarized below:

  1. The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020

This law deals with the State APMC (Agricultural Produce Marketing committee) management and the market forces. This Act has made the following changes:

  1. The farmers shall get a choice of selling their produce in either APMC or to the private players.
    1. The farmers can sell their produces barrier free Inter-state or even to other APMCs within the state.
    1. No Cess / levy on sale by farmers and no transport costs
    1. E-trading introduced, which is similar to the existing e-NAM for integration of APMCs []
    1. Minimum Support Price (MSP) to continue at APMC

Note: There is a separate 2003 Model APMC Act which is adopted by the State Governments to create their State APMC Laws. In 2017-18, revised model APMC were released by the Central Government however, most of them were not implemented by the States.

Author’s view: The law intends to empower the farmers with more options to sell their produce and market their products. The question is always on the execution of the law, which only time would tell. Nonetheless, it is a good move towards liberation of the marginal farmers. Unfortunately, most of the marginal farmers are not even aware that there exists some MSP by the Government, a lot need to be done on educating them. We at Nimble Growth keep our farmer partners’ interest first and educate them at every phase.

  • Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020

This law deals with the Contract Farming – Pricing, Contract and Farmers Income. This Act has made the following changes:

  1. Price assurance to be given to the farmers even before sowing of crops.
    1. It shall enable the farmer to access modern technology, better seed, and other inputs, reduce cost of marketing and improve income for the farmers.
    1. Setting up of effective local dispute resolution mechanism.
    1. The farmers shall have the power to fix the sale price for their produce.
    1. The produce needs to be collected at the farm gate itself.

Author’s view: This is a beautiful law to protect the interests of the farmers. It has been brought to regulate contract farming and safeguard the rights of the farmers. This would boost the confidence of the farmers while working with the private players and the corporate. With this partnership, we may witness significant development in the agri-space, especially, with moving of private capital into farming and growth in terms of use of technology, marketing and other benefits. We are proud for the work that we do at Nimble Growth. Since 2016 i.e. 4 years before this law even saw the light of the day. We work with our farmer partners (250+) and help them with technology adoption, production process, quantity and price commitments even before sowing. No wonder, why our farmers are super happy working with us and are making a sustainable income along with better soil health and environment.

  • Essential commodities (Amendment) Act, 2020

This law deals with quantity restrictions in Essential commodities. This Act has seen the following changes:

  1. Generally, the essential commodities have restrictions in terms of production, sales, hoarding etc. in terms of quantity.
    1. Cereals, Pulses, Oil Seeds, Edible Oils, Onion and Potatoes have been removed from the list of essential commodities except in case of National disaster with some exceptions.
    1. The idea behind this move is to take the benefit of economies of scale.
    1. Further, this is done to optimize and increase the participation of private players by removing the fear of excessive regulation in business operations. Also, FDI and private sector shall provide for modernization, cold storage etc.

Author’s view: It is indeed surprising and sad to share that almost 35-40% of the produce get wasted today due to lack of the infrastructure (cold storage, proper transportation etc.) across the country. Hopefully, the intent of this amendment gets implemented and benefit us and not waste our resources. Every produce counts. At Nimble Growth, with our robust planning and the use of technology, the wastage at our farms is very low. We further strive to bring this down significantly in the future.

The reading of the law suggests, to be good and in favour of the farms and the farmers. However, the success of any law depends on its implementation and execution. We hope the law would be followed in letter and spirit.

Best wishes,

Rahul Saria


Nimble Growth Organics ®

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